He is using a descending channel that shows the price bouncing on the support line. Let’s take a closer look at this channel and see where a reversal might occur.
The one chart that rules them all for me at the moment. pic.twitter.com/7TiceEuXH9— f i l ₿ f i l ₿ (@filbfilb) November 22, 2019
Bitcoin Descending ChannelLooking at the Bitcoin price movement, we can indeed see a descending channel in place since the June 24 high. Due to the presence of several wicks, the support and resistance lines could follow slightly different slopes. Additionally, outlining a wave count we can see that the price is likely in the fifth and final wave of a 3-3-5 correction. It is possible that the correction end near $6000, at the support line of this channel and previous support area.
Long-Term SupportThe $6000 target also coincides with the long-term logarithmic support line in place since 2011. There is a confluence of support from both the line and the channel right at $6000. Looking closer at the movement, we can see that the price has found support above the 50-week moving average (MA). While a decrease to $6000 would take the price below this MA, it would be right above the 200-week MA. We could see a scenario similar to that in January 2019 when the price bounced at the support line and the 200-week MA, which were at the exact same level.
Oversold RSIFinally, the daily RSI gives us an interesting development. First, it has reached oversold values. Every time it has done so previously, an upward move ensued. Additionally, there is bullish divergence inside the oversold levels. The only time this happened was during the December 2018 low. To conclude, the Bitcoin price is trading inside a descending channel. There are several strong support areas at $6000, making it a very likely place to initiate a reversal. This view is supported by the readings from the RSI and previous price history.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.